National Biodiesel Board Calls for EPA to Act on RFS

WASHINGTON – The National Biodiesel Board on Friday asked the EPA to immediately establish biodiesel volumes under the Renewable Fuel Standard as it highlighted fallout from the Administration’s ongoing failure to establish functioning renewable fuels policy for the second consecutive year.

Industry leaders said the EPA’s recent decision to allow streamlined imports of biodiesel from Argentina under the RFS has only added new urgency to the need for stable policy.

In a letter to EPA Administrator Gina McCarthy sent Friday, former biodiesel producer and NBB Governing Board Member Ben Wootton challenged McCarthy’s recent comments suggesting that the RFS delays haven’t hurt renewable fuels industries. Wootton lost his Pennsylvania biodiesel plant, Keystone Biofuels, in bankruptcy last year as a result of RFS uncertainty. In his letter, he explained to McCarthy how the loss of his plant also forced him to lay off 30 employees and caused him to lose his daughters’ college funds and his retirement savings.

Wootton pointed to a statement late last year in which McCarthy said: “While I would have preferred to have this rule done earlier, it hasn't slowed down that industry that I can see.”

“I would invite Administrator McCarthy to come to my shuttered plant and talk to some of the laid off workers, or to visit practically any biodiesel plant across the country to see the damage that is taking place,” Wootton said.“It is obvious that this administration doesn’t understand the severe damage that the uncertainty surrounding this rule has caused our industry and the thousands of employees it represents. It is beyond frustrating that an Administration I have strongly supported has inflicted so much harm on an industry it says it supports.”

The EPA has failed to establish biodiesel volume requirements under the RFS for 2014, 2015 and 2016. Under statute, all three years’ volumes should have been set. While certain sectors of the renewable fuels industry have fared better in absorbing the RFS uncertainty – particularly more mature industries such as corn ethanol – the delays have been disastrous for new industries still getting off the ground. This is particularly true for biodiesel, the first EPA-designated Advanced Biofuel under the RFS to reach commercial-scale production nationwide.

Exacerbating the difficulties facing the industry, the EPA earlier this week approved a streamlined approach for allowing imports of Argentinian biodiesel into the US – fast-tracking foreign imports under the RFS that are subsidized by Argentinian tax policy and are likely to undercut U.S. production. The decision has been perceived by biodiesel producers and the domestic soybean industry as adding insult to injury.

“It is shocking that at a time when our renewable fuels policy is in a shambles, the EPA has essentially greenlighted biodiesel imports from Argentina to qualify for the RFS, with very little oversight or verification that the resources used to make the fuel will be grown under the normal RFS sustainability requirements,” NBB CEO Joe Jobe said. “We have done everything we can for two years to help this Administration develop reasonable policy that matches President Obama’s stated support for renewable fuels, but we are at wit’s end. We are desperately searching for any indication that this support actually exists.”

Added Wootton: “Based on years of statements by President Obama and Administrator McCarthy, we all believed we had an ally in this Administration. I and so many others in a similar situation are stunned and frustrated by this lack of leadership and the failure to act.”

Recent EPA statistics show that the U.S. biodiesel market dropped in 2014, from a high of 1.8 billion gallons in 2013 to 1.75 billion gallon last year. But the total volumes – which remained steady only because the EPA last year signaled that it would finalize a strong RFS – mask the fact that dozens of biodiesel plants have stopped production or laid off workers in recent months. The most recent casualty was Green Earth Fuels, a large plant outside Houston that filed for bankruptcy earlier this month.

“Our overall production numbers were down only slightly for 2014, but that is an illusion,” Jobe said. “This is an industry hanging on broken promises and leveraging everything waiting for the EPA to comply with the law. We have dozens of producers just barely hanging on.”

Biodiesel – made from a variety of resources including recycled cooking oil, plant oils such as soybean oil, and animal fats – is the first EPA-designated Advanced Biofuel to reach commercial-scale production nationwide. According to the EPA, biodiesel reduces greenhouse gas emissions by 57 percent to 86 percent compared with petroleum diesel. With plants in nearly every state in the country, the industry supports some 60,000 jobs.